The EILERS-FANTINI survey is designed to track slot machine and related technology purchasing trends on a quarterly basis and is the gaming industry’s largest slot survey in terms of total casinos and slot machines surveyed.
This quarter’s report represents our 17th proprietary slot survey and includes record-level responses from key purchasing agents at a number of North American commercial and tribal casinos and several racino/VLT operators, as well as six international participants. (Chart 1)
In total, 82 survey participants collectively operate 243 gaming venues with approximately 287,600 total slot machines or equivalent gaming devices. The 77 North America participants operate 210 casinos and approximately 276,998 slot machines, representing about 28.7 percent of the total install base of machines in North America.
Following are the key survey highlights for the fourth quarter of calendar year 2013.
Purchasing Activity
The North America survey participants purchased and took delivery of 7,294 slot machines in the fourth quarter of calendar year 2013, including 1,623 new and expansionary units and 5,671 replacement units, while also purchasing 4,150 conversion kits in the quarter. The international participants purchased 251 games in the quarter (all replacement games) and 310 conversion kits. Based on this quarter’s survey results, we estimate that the total of North American replacement sales is likely to be about 16,500 games in the fourth quarter of 2013, with total unit demand at about 22,800 game sales, which includes new and expansionary units.
These purchasing activities lead to big quarters for IGT and Ainsworth. Survey participants purchased 54 percent of their games from IGT in the quarter, driven by the conclusion of a large video poker order. However, excluding video poker, survey participants only purchased 30 percent of games from IGT, which was 5 percentage points below the company’s TTM average. Ainsworth, Aruze, GTECH, Multimedia Games and Konami all gained ship share in the quarter versus each company’s trailing 12 month average, with Ainsworth leading the pack with strong sales in East Coast markets (Charts 2 and 3).
Meanwhile, Non-Big 5 vendors continue to take market share in North America, with survey participants purchasing 15 percent of games from these emerging vendors during the quarter, compared with 12 percent last quarter. Excluding IGT’s video poker order, participants purchased 22 percent of their games from Non-Big 5 vendors versus 13 percent last quarter, which is a record since we have been tracking game purchases (Charts 4 and 5). I know we have stated this many times before, but if you are not tracking GTECH, Multimedia Games, Ainsworth and Aruze, you are completely missing the picture with respect to purchasing activity in the gaming equipment marketplace.
Gaming Operations Expansion
This quarter our survey participants added 258 (net) recurring revenue games, which included 153 (net) additions from new casino openings, 91 (net) removals from 100 percent leased Class II and VLT casino operators and another 196 (net) additions at existing traditional casinos. As for suppliers, Aristocrat, WMS, Bally and Multimedia Games all showed healthy net additions to their lease install base while IGT was the primary share donor in the quarter (Chart 6).
Top Games
IGT’s Wheel of Fortune remained the gaming industry’s top performing premium leased game in this quarter’s survey, although its lead decreased as Aristocrat’s Buffalo Stampede made substantial gains in the quarter. WMS’s Wizard of Oz brand was the second best performing premium leased title this quarter, and its Willy Wonka title was tied for third place with Aristocrat’s Buffalo Stampede.
GTECH’s Sphinx 3-D game was the most highly anticipated game this quarter for the second quarter in a row, earning 32 percent of the votes, or 21 out of 65 total responses. Aristocrat’s The Walking Dead also made a strong move up the charts, landing in second position this quarter and earning 29 percent of the survey votes. IGT’s Avatar-branded game was also cited as the third most highly anticipated game, earning 15 percent of the votes.
Replacement Demand
The 77 North America survey participants expect to replace 7.3 percent of the casino-owned games on their floors in calendar year 2014, which is roughly in line with our replacement expectations (excluding Canada and Oregon VLTs), implying low- to mid-single digit growth in 2014 versus 2013.
Technology Interest
Interest in picture-in-picture (PiP) and printer-based target couponing technology remains steady. Roughly 30 percent of participants plan to install PiP system technology over the next 12 months, and roughly 16 percent of participants plan to install printer-based targeted promotional couponing technology. Both metrics are consistent with prior quarter responses, and Bally remained the preferred PiP vendor while TransAct was the preferred smart couponing solution.
Slot Tournament Solutions
Finally, Multimedia Games has the best slot tournament solution. Based on our survey results, participants overwhelmingly cite Multimedia Games’ TournEvent as the best slot tournament solution in the market, followed by Bally’s iView DM Tournaments and IGT’s Tournament Manager.